Leander ISD is expecting to pay $36.2 million back to the state in recapture for the 2022-2023 school year—the district’s first recapture payment in eight years.

LISD’s large recapture payment is due to increased home property values, Chief Financial Officer Elaine Cogburn said. According to district budget documents, taxable property values grew by about 30%—more than the district evaluated in the spring.

Recapture is a function of the amount a public school district receives in tax collections and how much that amount exceeds what the district is entitled to keep, based on the number and type of students in its district, Cogburn said.

“The property values significantly changed,” Trustee Gloria Gonzales-Dholakia said. “With that giant increase in those property values, we knew and we anticipated that there was going to be a significant amount of money that was going to have to be sent back via recapture.”

This is the first time since the 2014-15 school year the district has had to pay into recapture. The cost then was $227,490.

Cogburn said there is nothing the district could have done to prepare for this other than projecting numbers and modeling recapture scenarios.

The estimated $36.2 million recapture payment is based on student enrollment predictions, attendance rates and actual tax collections, Cogburn said. The district will not know the actual cost until this fall.

Although the recapture payment does not directly affect the district’s revenue, the money could have been spent elsewhere.

“If there was no recapture, then I guess you could say we’d have $36 million more that we could’ve used toward teacher salaries, additional staff, class size reduction, etc.,” Cogburn said.

In the event that the proposed voter-approval tax rate election, or VATRE, fails in November, LISD would be facing a $35 million budget deficit.

As home property values and student enrollment numbers increase and fluctuate, LISD will likely have to consider higher recapture payments every year.

“We’re kind of just playing the cards that the state gives us through the funding formula; there’s not a ton of options available to us outside of that,” Trustee Aaron Johnson said.

LISD is not the only district paying into recapture. Many in the Austin area are facing record-high payments, including Austin ISD, which pays the highest amount of recapture in the state. Some experts question if the system is working as intended.

“When recapture was first created, [its job] was really to seek equity across the state, so that every student in Texas had access to an exceptional education,” Gonzales-Dholakia said. “The problem is right now a lot of those recapture funds that are going back to the state are then not being reinvested in education.”